Connecticut's Teacher Surplus Hurts Students Who Need To Repay Loans

When Susan Katz was a college sophomore majoring in education,
Connecticut's loan-forgiveness program for prospective teachers seemed
like a golden opportunity.

Under the terms of the program, the state would provide loans for
her tuition and she would pay them back by teaching in a Connecticut
school. State officials at the time were predicting dire teacher
shortages and, to Ms. Katz, there seemed to be no question she could
get a job in the field.

Today, however, after five years and more than 100 fruitless
attempts to find a job in 50 different school districts across the
state, Ms. Katz's is understandably less enthusiastic about the
program.

In November, despite her best efforts to land a teaching job, the
young woman must keep her part of her bargain with the state and begin
paying back her loan at the rate of $340 a month. And that expense, she
said, is hardly affordable on the wages she earns working as a waitress
and a bank teller.

"If I had had any idea this would happen when I accepted the loan, I
probably would have reconsidered," she said.

Like a number of other young people in the state, Ms. Katz is
discovering she has become the inadvertent casualty of a combination of
state education reforms that, in essence, worked too well.

Owing to the state's efforts to increase teacher salaries and make
the profession more attractive, the teacher shortages predicted by
state education officials in the early 1980's never materialized. Now,
according to state Commissioner of Education Gerald N. Tirozzi,
Connecticut has a surplus of qualified teaching candidates in virtually
every specialty area.

Students such as Ms. Katz, unable to find teaching jobs in a
suddenly tight job market, are now faced with the uncomfortable
prospect of having to pay back money they thought they had gotten for
free.

"No one could have predicted this would happen," Mr. Tirozzi said.
"But I'd rather be guilty of planning for the future and really making
an effort to ensure that our classrooms would be staffed with
high-quality teachers."

Connecticut is one of nearly 40 states with some form of
loan-incentive program for prospective teachers. Efforts to extend and
expand such programs are under way in several states. (See Education
Week, Feb. 28, 1990.)

Mistaken Projections

The plight of Connecticut graduates such as Ms. Katz has come to
light in recent months as the legislature there has debated a bill to
ease some of the terms of its loan-forgiveness programs.

More than 500 students like Ms. Katz have obligations under one of
two such programs established by the state in 1983 and 1984 in an
effort to avoid looming teacher shortages.

One program, known as the Teacher Incentive Loan program, was
designed to attract teachers in the subject areas where impending
shortages were thought to be greatest, such as mathematics, science,
industrial arts, and special education. It forgave loans at the rate of
20 percent a year for each year the borrower taught in one of those
specialty areas.

The other, called Education Loans to Encourage Excellence in
Teaching, was intended to draw "the best and the brightest" students to
the field. It provided academically talented freshmen like Ms. Katz
with up to $20,000 in loans over four years, which could gradually be
forgiven as borrowers taught in public or private schools.

"We had a booming economy at the time, and all of our best and
brightest were heading off to science and industry," explained Cathy
McManus, a spokesman for the state education department.

Because of the current glut of teaching candidates, neither program
has been funded over the last three years.

Less than three years after launching its loan-forgiveness programs,
the legislature stepped up efforts to bolster the state's teaching
force by passing the Educational Excellence Act. The measure provided
$300 million in grants over three years to help school districts
increase teacher salaries.

By 1989, as a result, the average teacher salary in the state had
increased from $27,035 in 1985-86 to $38,140. And Connecticut teachers,
once ranked 13th nationally in average teacher salaries, are now the
second most highly paid teachers in the country, according to state
education officials.

That reform and a number of other smaller measures helped draw
teachers from other states and other professions to Connecticut's
public schools. In addition, the large number of teachers who were
expected to retire decided instead to keep working.

"This is what disturbs me," Ms. Katz said. "One year they're giving
us all this money, and the next year they turn around and make it
impossible for us to get a job."

Many of the 500-plus borrowers under the two loan-forgiveness
programs are still in college. Of those who have graduated, more than
200 have landed teaching jobs, state officials said.. The rest now face
the prospect of having to pay back the loans.

According to John Siegrist, director of financial-aid services for
the state department of higher education, two teachers with loanshave
been laid off. A dozen other borrowers have been given one-year waivers
on their obligations because of financial hardships, and 24 more are in
a one-year grace period that followsgraduation. Another 75, like Ms.
Katz, face payments of up to $440 a month beginning this fall.

"The vast majority of these people wanted to be teachers and needed
funds," said Thomas Anderes, assistant commissioner of financial
affairs for the state higher-education department. "I think most of
them went into this with the idea they wouldn't have to make any
payments because they would be able to get a job in teaching."

In an effort to ease the financial burdens of some of those
graduates, state Senator Kevin Sullivan, the chairman of the
legislature's joint education committee, is sponsoring a bill that
would extend the repayment terms for both loan programs by two
years.

Solving the Problem

In addition, the bill would extend forgiveness under the Teacher
Incentive Loan program to special-education teachers in private
programs that contract with publicschools. Because they do not work for
public schools, these teachers have not benefited from the forgiveness
program.

The bill was passed by the joint education committee last month, and
is expected to win the approval of the legislature when it comes to the
floor.

The proposed changes, however, fall far short of what
higher-education officials--and borrowers--had advocated.
Higher-education officials had asked lawmakers to extend the payback
period to 10 years, forgive loans for borrowers teaching in community
colleges or private preschools, and authorize the commissioner of
higher education to forgive the obligations of those whohave made a
genuine effort to find a teaching job.

Mr. Sullivan, however, pointed out that, with interest rates ranging
from 7 to 11 percent, the loans were competitive with, or even less
expensive than, education loans from private lenders.

"Essentially, this was a subsidized-loan program," said Mr.
Sullivan. "And the feeling of the committee was that if people had the
capacity to repay, it was not unfair to ask them to do so."

Mr. Sullivan also said the relatively low interest rates may have
prompted some students who had no intention of becoming teachers to
take out the loans.

Trying Harder

For his part, Commissioner Tirozzi is unconvinced that the graduates
facing repayment have looked for jobs in the inner-city school
districts where he says they are most likely to find them. Despite the
teacher surplus, more than 100 new teachers were hired in the state
last year. Mr. Tirozzi said most of those jobs were in the state's
three largest cities--Bridgeport, Hartford, and New Haven.

State officials are also predicting that job prospects for many of
the graduates will improve in the next two to three years as older
teachers retire. Forty percent of Connecticut teachers are expected to
retire over the next decade, according to Mr. Tirozzi.

If school districts begin to provide some early-retirement
incentives, the state chief said, as much as half of the teaching force
may be leaving.

"When I look at the greater good for the state," Mr. Tirozzi
concluded, "I really have to say I think all of this is a very positive
outcome."

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